Agenda item

To review progress on internal audit recommendations

Recommendation: That the Committee is requested to:

• Receive and note progress with the 2025/26 Internal Audit Plan and outstanding recommendations.

• Approve the change to the Internal Audit Plan

The HOIA introduced the report and explained there were 11 audits to complete, 3 of which had been finalised. She highlighted that there were 34 outstanding recommendations with 1 limited report in reference to licensing that had an urgent recommendation.

Cllr Fletcher asked about the urgent recommendation that was highlighted by the HOIA in reference to renewal of premises licenses and the large amount of money that hadn’t been recouped. He was alarmed by the grace period allowed to businesses to settle the outstanding fees and the fact it appeared not to be tightly observed.

The DSD was aware that the Environmental Health (EH) team were working on those licenses and fees but did not have an up-to-date position at that time so offered to report back after the meeting. He explained EH now had a business manager in post looking at the processes to ensure not only the correct fees were charged for all licenses but that they were collected in a timely fashion.

It was felt by the Chair, that the guidance clearly stipulated that the Authority must suspend a license when it was not renewed on time and that the Council must enforce this on each occasion, when necessary, to be consistent. The MO clarified there was a system of debt recovery which would allow any outstanding fees to be chased that way. The MO also said that a period of grace to settle the outstanding fee, rather than immediately suspending the license was a pragmatic way of managing the situation but agreed that getting correspondence to those businesses impacted, outlining the consequences of non-payment of the fee, which could result in a potential suspension of the license, was important to do in good time.

The Chair said any grace period was open to misinterpretation and that the public may perceive that some businesses were given longer to renew before being suspended when others were suspended immediately. The Chair added it was important that businesses knew where they stood and that the Council did not leave itself open to criticism for being perceived to show any bias.

Cllr Cushing asked why a manual system had not been put in place to avoid the number of outstanding fees being owed when the Council knew the automated service was going to be switched off. The DSD said the old automated system closing was not the choice of NNDC and although it could make representations to the software companies that ran them to add certain features, unless EH were to pay, at significant cost, to include them they could not dictate to that company what functionalities their software would be able to provide. The DSD assured Cllr Penfold, who believed that the procedures needed to be tightened to reflect what EH expectations were, i.e. when the fee was due and the consequences of not paying, that those procedures were now being put in place as part of the new EH Business Manager’s focus before communicating that to businesses in good time.

It was suggested by the IP that he would expect to see quite tight budget management on the recovery of fees and there was a risk of a legal challenge should any license holder feel they were being treated differently to another, with regards to grace periods and penalties being enforced or not.

Cllr Boyle highlighted that figures in the report showed that work was being done to review who still owed money and those businesses being chased for fees in a process that was due to finish at the end of November 2025.

Feedback was offered by Cllr Holliday who felt more information of the progress being made earlier in the report would be helpful going forward, for example, what the urgent recommendations were and where within the report they could be found, as well as informing the Committee which items had been closed.

Cllr Holliday, referred to the 7 important recommendations around Artificial Intelligence (AI) and the item on the Section 106 (S106) which were of some interest to the Committee. The Chair said the piece around AI was an advisory audit but it did have a due date of the end of January so was also interested to ask if that deadline was realistic. The DSD felt some reflection was needed on those recommendations as the use, and benefits, of AI was something the Council should  be on top of. Updates for each service area were sought monthly and the DSD hoped that by the 31st of Jan those recommendations would have been closed or significant progress made to their completion.

Cllr Cushing asked if there was any benefit in discussing the risk of AI with other councils for shared learning and pooling resources with LGR in mind. The HOIA was aware that some were using AI in a similar way to North Norfolk and others were using it more readily, within a safe environment, and with training provided.

The DRC explained that the new S106 officer would be in role by the end of the year but would need some training to get up to speed. The DRC had discussed with the team leader any existing S106 grants the Council retained, that were close to expiring, so that an action plan was in place to mitigate the financial risk of repaying such grants.

It was pointed out by the IP that a number of the actions had the same responsible officer and felt it would be good practice to seek reassurance that the officer in those cases had sufficient capacity.. The IP was also concerned about date slippage and suggested adding a column to the report showing what confidence the responsible officer had in hitting their targets, for transparency purposes, so if the Committee, or other responsible bodies, felt it was critical they could act accordingly. The DSD explained that the responsible officer was more appropriate for those in post at Assistant Director level throughout rather than have multiple responsible persons across the organisation. Being the responsible officer didn’t mean, therefore, you were responsible for doing the work itself in all those cases. CLT was concerned of the high volumes of work for those officers, when additionally working towards devolution and Local Government Reform (LGR). CLT asked for updates regularly and if there was going to be a slippage ensuring there was a justified reason as to why that was going to happen.

The HOIA said they worked with CLT in getting updates for the outstanding recommendations but felt that adding a percentage showing the officers confidence level was an option they could explore. The DSD agreed but said they had improved on getting to a point where officers didn’t wait to be chased before actioning something for an audit and capacity levels had to be considered if then adding another update they needed to provide for the internal audit report. The DSD did say they already challenged those responsible officers to look at those deadlines, when they were agreed, to see if they were achievable and to have an open dialogue with the auditors. The CLT had tried to ensure that dates were not continuously moved but should they need to be, for justified reasons, then the new deadline was set with a high degree of confidence that the target should be met.

The Committee noted the report and approved the change to the Internal Audit Plan.

ACTION: The Committee agreed the DSD should provide a written report within 1 month outlining

• The number of premises that still need to pay their fee and the value of the those licenses outstanding.

• The documentation associated with license renewals demonstrating the grace period has been removed.

• The processes in place when renewing a premises license, clearly showing that reminders are going out in a timely manner and the consequences of not paying the license fee are clearly communicated.

• To update the Licensing Policy by March 2026, reflecting those changes in procedure.